Building a Better Future Stretch Building Code October 15, 2009

2 Mass Building Code Evolution Starting Jan 1, Mass building codes will be updated every three years with increasingly higher efficiency standards Performance testing will be required for new homes base code compliance –Blower door test and duct tightness Most builders are building better than code –Without testing, we dont know how much better

3 Mass Building Code Evolution Today –Residential: IECC 2006 –Commercial: ASHRAE January 1, 2010 –Residential: IECC 2009 Requires performance testing: duct tightness, blower door tests –Commercial: ASHRAE Stretch Code Option –Residential: 30 or 35% better than IECC 2009 Basically the same as Energy Star Tier 2 homes –Commercial: 20% better than ASHRAE January 1, 2013 –Residential: IECC 2012 –Commercial: ASHRAE

4 Stretch Building Code Higher efficiency building code –20% better for commercial –30 to 35% better for residential Comfort –Homes feel warmer with fewer drafts –Stays warmer in winter / cooler in summer Lower Energy Bills –30 to 35% annual energy savings –$30,000 over 10 years for a typical new home in Lexington Higher Resale Value Environment –30 to 35% reduction in greenhouse gas emissions and pollution Spring Town Meeting Vote

5 Energy Efficient Mortgages (EEM) Value of improvements are added to appraised home value Improved mortgage qualification standards –Homeowners effective income raised by amount of annual energy savings Loans allowed up to 15% of homes appraised value for HERS rated improvements

6 Efficiency Incentives for Homeowners 30% Federal Tax Credit –Water Heaters, Furnaces, Boilers, Heat pumps, Air conditioners, Building Insulation, Windows, Doors, Roofs 75% of residential project costs up to: –$2,000 for weatherization projects MassSAVE HEAT loans for retrofit –7 year, 0% interest, $15,000 loan for Attic, Wall, and Basement Insulation High Efficiency Heating Systems High Efficiency Domestic Hot Water Systems Solar Hot Water Systems Energy Star® Windows

7 Commercial Building Owners Stretch buildings Cash flow positive from day 1 Efficiency provides rate of return >30% –IRR often over 100% with 5 year financing Higher productivity of employees –Less absenteeism

8 Efficiency Incentives for Commercial Buildings NSTAR / National Grid rebates –50% of commercial HVAC project costs up to: $100,000 for existing buildings $250,000 for new buildings –70% of commercial lighting upgrade costs 30% interest free loan for remainder Corporate Tax Deduction - $0.30 to $1.80 / ft 2 –Equipment Insulation, Water Heaters, Lighting, Lighting Controls/Sensors, Chillers, Furnaces, Boilers, Heat pumps, Air conditioners, Caulking/Weather-stripping, Duct/Air sealing, Building Insulation, Windows, Doors

9 Town Benefits Green Communities Funding –$10M per year set aside for Green Communities –$100K - $300K potential state funding for Lexington Implement energy efficiency programs Lower energy costs Reduce towns budget The gift that keeps on giving –Stretch Code implementation required to receive Green Community funds

10 Builder Benefits Improves builders margins –Efficiency improvements can generate substantial additional gross margin for builders Improves builders time to sale Lower HVAC costs –Smaller furnace and AC units Rebates available for building efficient homes Strong homeowner demand for green homes Stretch builders will have an advantage over standard builders

11 Efficiency Incentives for Builders New Home Federal Tax Credit –$1,000 to $2,000 per home Energy Star Rebates –$1,250 for HERS 65 rating Technical Support & Training Available

12 Realtor Benefits High efficiency homes sell at higher prices High efficiency homes sell faster Lexington could be marketed as preferable to neighboring communities –Lexington is a Green Community –Builders are better & more knowledgeable –Lexington homes cost less to heat than those in neighboring communities –Lexington is building a better future –Another reason Lexington is such desirable community

13 US Energy Consumption

14 Global Benefits Buildings generate 40% of nations CO 2 emissions –This is up from 35% of nations CO 2 in 1990 –Buildings have a larger share of CO 2 emissions in Lexington Whether our target is 50% or 80% reduction in emissions by 2050, we cant get there without much more efficient buildings Building codes are necessary to make a meaningful change in building efficiencies Buildings have 100 year or longer lifetimes We need to start now

15 Our Economy & National Security Every dollar we save on energy –Is a dollar that stays in the local economy –Supports local businesses & local jobs –Strengthens our economy The energy dollars we send overseas –Create national security risks –Are lost to our local economy

16 Stretch Code Approval Building better buildings –Creates local jobs –Lowers our energy costs Energy savings dollars that stay in the local economy –Cuts greenhouse and environmental pollution –Saves lives and improves our health –Improves our national security Provides additional state funding for the Town of Lexington

17 Lexington New Home Data